Hop on your ship and head south, dock around the desert area, and follow the arrow on the map.

Side Quest: talk to the boy who is running around the grass in the southwest area; he'll ask you to ride a Chocobo around the continent.

1. Exit the town, then walk a few steps east to enter the Chocobo Woods.
2. Catch a Chocobo, then start riding around the continent in a clockwise direction.
3. Once completed, go back to the boy and talk to him for a reward: Gnomish Bread.

Chests/Items:

• I-032: Serpent Sword - examine the lone tree in the far east.